Sen on the future of capitalism

[Tiamat]

By refusing to vote for it, expending political capital to oppose it, refusing to cooperate with it getting out of comitees, etc., etc.

Its not like the minority party is helpless or something.

The majority party of the House is generally well disciplined. Frank could huff and puff all he wanted, but his vote was not required for the bill to leave committee. I doubt the Democrats could even offer amendments to the bill, given how the House has been run in recent decades.

The minority party is helpless in the House, but they can certainly be obstructionists in the Senate.

[Berkut]

By refusing to vote for it, expending political capital to oppose it, refusing to cooperate with it getting out of comitees, etc., etc.

Its not like the minority party is helpless or something.

The majority party of the House is generally well disciplined. Frank could huff and puff all he wanted, but his vote was not required for the bill to leave committee. I doubt the Democrats could even offer amendments to the bill, given how the House has been run in recent decades.

The minority party is helpless in the House, but they can certainly be obstructionists in the Senate.

Bullshit. Who the fuck are you anyway?

The minority party is hardly helpless, or there would never be any debate. Neither party is super disciplined, and you need votes from the opposition as foten as not to get anything done. Powerful politicians like Franks manages votes in his own party, and influences others outside his party.

You act like Congress just sits there, with the non-majority party steaming while the majority marches in lockstep doing whatever they like. What a convenient position to take when it comes to recognizing that people like Franks had a direct hand in letting FF and the mortgage market slip the leash, because that is what they wanted.

[Tiamat]

And the idea that the blame CANNOT be on the Dems at all, because they were not in the majority at some cherry picked moments over the last ten years, is equally ludicrous.

Six years out of the previous decade is hardly a cherry picked moment. The reason credit default swaps weren't regulated is directly due to the actions of individuals like Phil Gram. I'll leave you to guess what business scam he got involved in following his retirement from public life.

[Tiamat]

Bullshit. Who the fuck are you anyway?

The minority party is hardly helpless, or there would never be any debate. Neither party is super disciplined, and you need votes from the opposition as foten as not to get anything done. Powerful politicians like Franks manages votes in his own party, and influences others outside his party.

You act like Congress just sits there, with the non-majority party steaming while the majority marches in lockstep doing whatever they like. What a convenient position to take when it comes to recognizing that people like Franks had a direct hand in letting FF and the mortgage market slip the leash, because that is what they wanted.

House debate can neither be considered persuasive or meaningful opposition. Under Delay the House Republicans were exquisitely well disciplined.

You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.

[garbon]

You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.

So he had to go around speaking in support of it?

[Tiamat]

You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.

So he had to go around speaking in support of it?

I'll take Berkut at his word that Frank voted against the bill and spoke out against it. The fact remains that Frank didn't have the power to stop it in either committee or the floor.

[Berkut]

You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.

So he had to go around speaking in support of it?

I'll take Berkut at his word that Frank voted against the bill and spoke out against it. The fact remains that Frank didn't have the power to stop it in either committee or the floor.

you don't ahve to take me at my word, the stories are out there. Go do a google search on Barney frank and Freddie Mae Fannie Mac.

That is a incorrect and simplistic view of how congressional politics works.

The majority party does not just get to do whatever they want, and the minority is utterly powerless. People like Franks have power whether they are in the majority or not, and they have influence.

Not every single Republican is going to vote for exactly what they are told to vote for, and the same with Dems. There is compromise and trading going on all the time.

I notice how you conveniently ignore the entire point though - Franks IS in the majority NOW. And he still believes that his job is to use the markets to ensure social equality or whatever such nonsense motivated him to bleat on about how reform must be stopped if it means poor people cannot buy a McMansion, as they so clearly deserve.

[The Minsky Moment]

Sadly, my story is rather simplified, but largely accurate.

The Times piece you cite does not prove your case.  It is a single quotation from Frank, and as it happens, his statement was accurate - in 2003, Fannie and Freddie were not yet facing a financial crisis.  Indeed, the administration in proposing the legislation specifically stated they did not believe the GSE's were in crisis at the time.

The issue at stake in 2003 was whether the Treasury Department should be given primary responsibility for GSE regulation.  While there was a prudential justification advanced for this proposal, the reality was the bill would not affect the way the GSE's did business and specifically would not affect the originate and distribute model that was at the root of the problem.  (AEI criticized the legislation at the time on precisely these grounds).  Frank and other critics expressed opposition on the grounds that transfer of regulatory functions to Treasury would risk unduly politicizing the GSE's.  Put crudely, they didn't wanted to give the Bush administration greater control over the GSE management.  In any event, the legislation died when it got bogged down in committee and the admin lost interest.  The GOP of course had a siginificant majority at the time, but little interest in pushing a reform that had major private housing pressure groups opposing it.

Nice job on regurgitating Franks press release where he tries to pretend he was on the other side of this issue. The fact of the matter is that Frank opposed any kind of reform, and fought it tooth and nail, and even once a bill was passed that was a piece of shit, watered down joke of "reform", he STILL voted against it.

I didn't cite any press release. ???

The point isn't that Barney Frank was right.  The point is that singling out Frank for blame makes no sense.  The oppportunities for reform were there and no one pushed it.  The GOP had congressional majorities during the time all these proposals were being discussed, and in some cases never bothered to try to report anything out of committee.  It was not a legislative priority for either branch, and no one wanted to seriously change the system.

[Valmy]

Yeah this is not a parliamentary system and party discipline is poor, particularly for the Democrats who have alot of members more conservative than Republicans in some areas.  The majority party theoretically has power, but in fact needs to get votes from sympathetic members of the other party to counter the renegades in their own ranks to get anything done.

Besides Franks is one of the most senior and prestigious members of the House.  His opinion did and does carry enormous weight.

Plus he is giving the Leftist crowd what they want: a public authority pinning the blame for the crisis on greed and lack of regulation (which was a part of it) and deflecting blame from the Fannie/Freddie policies themselves (which also play a huge part).  That is rather dangerous, as it creates a myth about the crisis that is not realistically the whole picture.

[The Minsky Moment]

The majority party does not just get to do whatever they want, and the minority is utterly powerless. People like Franks have power whether they are in the majority or not, and they have influence.

They have some power and some influence, but not as much as the majority.
I understand what you are saying here - but it seems a little bizarre that when over the course of a number of years there is a party that controls both branches of government, and (a) no one even proposed a reform that would actually have had the effect of preventing this outcome, and (b) those watered down proposals that were made did not receive widespread support from the majority and were allowed to die in committees controlled by majority, that one would choose to single out one individual - and that one individual happens to be a member of the minority party in the House of Representatives.

[The Minsky Moment]

Just so that we can clear about the nature of the "reform" that Barney Frank supposedly nixxed with his awesome powers of negation, here is a description from one the bill's senior backers, the then #2 guy on the committee (richard baker, LA):

Over the years, questions concerning mortgage-backed securities, leverage ratios, duration gap, bank investment concentration of GSE securities and a lot of other unique issues have been before the committee.   I am, frankly, quite ready, in fact anxious to turn over the examination of many of these questions to a fully funded, properly constructed, independent regulator, full of professionals able to give analytical examination and appropriate answers to these myriad questions. . . . Others may suggest radical new capital regimes, perhaps unreasonable constraints on new product approval, or attacks on the basic structure of the charter. I do not intend and will not go there.     Responsible regulatory oversight is the goal, and the closure that results from this effort will be beneficial, in my judgment, to all concerned . . .
 
As the Secretary has stated, Fannie and Freddie are world class financial organizations, and they require a world class regulatory structure, which is independently funded, with all appropriate authority, and the ability to make professional decisions absent political interference.    That has been, and remains, my legislative goal. It is also evident that protracted discussion of these concerns really has had no adverse effect on home ownership opportunities.     For those who continue to object to any structural change in regulatory oversight, I suggest just taking a deep breath. What we have enjoyed and continue to enjoy, the lowest mortgage interest rates in our country's history. I suggest that Alan Greenspan and his effect is more powerful than any action this Congress or this committee might consider.    In fact, this effort is only to ensure that the secondary mortgage market has stability, not to place constraints that will in any way adversely affect any individual's ability to achieve the dream of home ownership.

Basically the motivation was to clear away the burden of regulatory analysis from Congress and slough it off to bureaucrats in Treasury.  There was no intent to make any real change in the way the agencies did business.  And that shouldn't be surprising because just like his colleagues on the Democratic side of the aisle, Rep. Baker received generous contributions from real estate and banking PACs, and had no interest in rocking the boat or endangering business as usual.

[Berkut]

I am not trying to single out Franks for special blame, just use him as an example to refute the conventional wisdom that this disaster is the result of Republicans nixing regulatory oversight for their fat cat capitalist buddies, and the solution is to embrace socialism and have the Dems fix everything.

And Franks is a perfect example of how the other side of the aisle has just as much blame as the republicans, if not more.

[Berkut]

Just so that we can clear about the nature of the "reform" that Barney Frank supposedly nixxed with his awesome powers of negation, here is a description from one the bill's senior backers, the then #2 guy on the committee (richard baker, LA):

Over the years, questions concerning mortgage-backed securities, leverage ratios, duration gap, bank investment concentration of GSE securities and a lot of other unique issues have been before the committee.   I am, frankly, quite ready, in fact anxious to turn over the examination of many of these questions to a fully funded, properly constructed, independent regulator, full of professionals able to give analytical examination and appropriate answers to these myriad questions. . . . Others may suggest radical new capital regimes, perhaps unreasonable constraints on new product approval, or attacks on the basic structure of the charter. I do not intend and will not go there.     Responsible regulatory oversight is the goal, and the closure that results from this effort will be beneficial, in my judgment, to all concerned . . .
 
As the Secretary has stated, Fannie and Freddie are world class financial organizations, and they require a world class regulatory structure, which is independently funded, with all appropriate authority, and the ability to make professional decisions absent political interference.    That has been, and remains, my legislative goal. It is also evident that protracted discussion of these concerns really has had no adverse effect on home ownership opportunities.     For those who continue to object to any structural change in regulatory oversight, I suggest just taking a deep breath. What we have enjoyed and continue to enjoy, the lowest mortgage interest rates in our country's history. I suggest that Alan Greenspan and his effect is more powerful than any action this Congress or this committee might consider.    In fact, this effort is only to ensure that the secondary mortgage market has stability, not to place constraints that will in any way adversely affect any individual's ability to achieve the dream of home ownership.

Basically the motivation was to clear away the burden of regulatory analysis from Congress and slough it off to bureaucrats in Treasury.  There was no intent to make any real change in the way the agencies did business.  And that shouldn't be surprising because just like his colleagues on the Democratic side of the aisle, Rep. Baker received generous contributions from real estate and banking PACs, and had no interest in rocking the boat or endangering business as usual.

Obviously his statements are a response to the idea that this regulation and oversight will make it impossible for TEH POOR PIPPLE to buy the houses they so certainly deserve to own, so he is emphasizing that more oversight should not have that effect (even if of course it does).

You are cherry picking a particular argument made at a particualr time and tryuing to present that as the basis for the efforts that went far beyond that particular argument - as the article I posted points out.

And the idea that someone is opposing a bill because it doesn't do enough is a rather old legislative trick, and one Franks knows very well. He opposed it because he opposed all attempts to regulate "his" industry, and even when his opposition resulted in a watered down and ineffective bill, he opposed that as well.

Not that this strategy is not done by both sides, with the crap like bills names to be the opposite of what they actually do and such. Or putting business interests in charge of the EPA. But it is kind of sad when people actually regurgiate it and put it forth as a point in favor in an outside debate.

[grumbler]

House debate can neither be considered persuasive or meaningful opposition. Under Delay the House Republicans were exquisitely well disciplined.

You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.

You hate Republicans and love Frank, I get it.  The fact of the matter is, though, that some Republicans tried to get reform for Freddie and Fannie passed, and some Republicans and some Democrats (including Frank) successfully blocked all reform.  That wasn't the fault of a party, but of specific politicians, among them Frank.

I know it blows your mind to even consider this in the absence of party demonization, but the rest of us (bar FB and Hans) don't have a problem doing that.  Frank is the guy with the smoking gun in his hand, no matter his party.

[Tiamat]

Frank is the guy with the smoking gun in his hand, no matter his party.

No, the man with the smoking gun in his hand is Phil Gramm. Frank had at most a BB gun.